The Antimonopoly Committee of Ukraine (AMCU) has submitted for discussion the restrictions on participation in tenders for the purchase of the Dnieper Metallurgical Plant (DMK). In case of winning the auction, the AMCU intends to oblige Metinvest to sell at least 12,000 tons of commercial pig iron annually to third parties within three years.
To participate in the auction, Metinvest sent an appeal to the AMCU back in 2020, but the application was considered for a long time, despite the limited time frame for the rehabilitation of the DMK.
Metinvest Group considers the AMCU’s obligations unreasonable, the terms of consideration of the application are protracted, and the attitude towards the Group is biased.
The main assortment of DMK products does not coincide with the assortment of products of the Metinvest Group. Other market participants have the opportunity to meet the demand for commercial pig iron in the amount that meets the obligations of the Metinvest Group. According to the company it turns out to be in an assured losing position in the sale of merchant pig iron.
Setting liabilities for Metinvest Group reduces the investment attractiveness of worn-out assets of DMK and creates unequal conditions for other potential bidders.
Obligations to sell commercial pig iron to third parties create obstacles to the consolidation of MMC’s assets into the Group, thereby limiting the possibilities for long-term investment planning.